Technology, Outdated Law and the New Goldrush

From the April 1995 issue of the Environmental Review.


 In 1872, the U.S Congress passed the law governing gold and silver mining to encourage mining and development of the West. The law provided generous incentives for hardrock miners to assume the financial and physical risks of prospecting and mining precious metals. For five dollars an acre a miner could obtain permanent title to any public land containing valuable mineral deposits. In 1994, mining concerns, many of them foreign, used this law to apply for title to 250,000 acres of land at five dollars per acre. An additional incentive in the law stipulates that gold, silver, platinum and copper are not subject to royalties paid to the government. When other natural resources are extracted from public lands - timber, oil, natural gas - the company pays the government a royalty, - 12.5% in the case of oil and natural gas. The current federal mining law has no provisions for mitigating the environmental damage of mining or for rehabilitation of played out mines.

     Improvements in technology have instituted a modern-day gold rush in the U.S. In the 1980s, the U.S. was the sixth largest producer of gold in the world; by 1993 the U.S. moved up to number two. Legislation was introduced introduced to reform the 1872 mining law, stimulating a modern day gold rush.  613 patent applications are pending on a quarter million acres of public lands in the West. These lands contain approximately $34 billion in precious metals for which  the government will receive a one-time payment of five dollars per acre or about $800,000.

     As an example, American Barrick, a Canadian mining company, has a land patent pending on 1800 acres in Nevada containing $10 billion in gold. When approved, it will pay the U.S. government $5,197.;that is, less than three dollars per acre. Another Canadian company, Noranda Minerals, had a patent pending in 1994 on seventy acres in in Montana containing 3.7 billion dollars worth of copper and silver. Noranda will pay the U.S. $185 for this land.

     Mining companies are taking advantage of the law to extract as many resources from the public lands of the United States as fast as possible. By stopping reform of mining law in the 103rd Congress, the mining industry saved 800 million dollars in royalties for 1994 alone.  A small number of senators from western states were successful in blocking reform of the mining law in the 103rd session of Congress. In the debate over the federal budget deficit, Congress has overlooked a substantial source of revenue to the federal treasury.

We spoke with Will Patric of the Mineral Policy Center about their efforts to reform mining laws. The Mineral Policy Center is a non-profit environmental organization based in Washington, D.C. Their primary purpose is to strengthen laws and regulations for hard rock mining concerns and to educate the public about some of the environmental concerns related to those operations. Mr. Patric is based in Montana and works with communities, activists, tribes, organizations in the six northwestern states on mining issues. He also monitors specific mining proposals. The main office of the Mineral Policy Center is at 1612 K St. NW Suite 808, Washington D.C. 20006.

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